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heyitsgogi writes "The New York Times is reporting that Apple has cleared Steve Jobs of any wrongdoing. From the article: 'In a filing with the Securities and Exchange Commission, Apple said that while its investigation revealed that the company's stock option procedures did not include sufficient safeguards to prevent manipulation, Mr. Jobs did not benefit financially from any questionable stock awards.' As a result of the internal investigation, Apple said it would record $84 million in expenses related to the options awards."

Rosie ODonnell says she's not fat.
Geek says that the 10 gadgets hanging out of every pocket makes him look sexy.
Linus says that Linux is the best OS ever.
Ballmer says the chair threw itself.
Pot denys that the kettle is black.

""Apple is in a much more difficult position than other companies in the backdating morass, because a significant portion of its market valuation is based on Steve Jobs staying at his job," he said."

Ah, and I suppose that if Bill Gates ever left Microsoft, Microsoft's stock would be doing just fine? (Note that there was a recent story from CNet news in which Gates went out of his way to say that he wasn't quite leaving MSFT yet...)

Geez - it's not as if Steve Jobs is God or anything (zealots' assertions

The so-called reality distortion field is really just demanding perfection. In business, especially large ones, people slack because they know everybody else is slacking. Jobs' reputation of coming down to the smallest employee and either firing them or berating them for not producing perfection means that everybody feels everybody else is doing their part. The key ingredient is that despite this people like Jobs and want the team to succeed. Only a genius leader can do that, and that's why he's so valu

Well it is not that Jobs is irreplaceable but Jobs is heart of the company. The reason for Apples success lately was because the systems follows Jobs vision of a computer. Microsoft and Dell tend to compromise what all their customers say they want and put it in. Apple just put in what Jobs like. Hence being able to Switch OS's and Platforms without missing a beat. Democracy doesn't always come up with the best solution just one that everyone can deal with. Apple either you love it or you hate it. Apple does listen to your advice but just because a lot of people want that feature it doesn't mean they will put it in.

I don't disagree at all that a person (or group of people, e.g. Mssrs Hewlett and Packard) can be the source of vision and be the very heart of a company. My assertion is that somehow the writer thinks that Apple would collapse into some sort of corporate supermassive black hole 5 minutes after Jobs cleaned out his desk and left the offices at Cupertino.

Seriously - Intel didn't implode when Andy Grove left. GE seems to be holding up okay minus Jack Welch... and both of them were HUGE driving forces in whe

Getting rid of incompetent management is harder than it sounds. That takes skill & balls. I've read a lot about Jobs' management style. Most CEOs don't seem to be as hands on. He seems to have a no compromise "my way or the highway" approach. I think his value is in his micromanagement.

Steve Jobs pulled the company back from extinction. During his reign we've seen the rise of OS X, the iMac phenomenon, the iPod juggernaut, iTunes, and other great software. The fact is the design and implementation of nearly all of Apple's products (especially the big ones) owe at least something to Jobs tweaking. Don't forget his massive performances every Macworld (less than 2 weeks, yea!).

The loss of Steve Jobs would be devastating to the company's stock, if not the company it's self.

In fact, not too long after they announced Steve Job's cancer and successful surgery last year there was an opinion piece in Forbes that made a very strong case that they were wrong not to tell the stockholders about it until after it was fixed because he was such an important part of the company that his health really mattered, compared to the financial results if the CEO of Bank of America got cancer. BoA has other capable people and could survive.

True or false, Apple is basically perceived by a great many people to be an extension of Steve of sorts. Without him there, it's not the same Apple.

Jobs is not poor, yet he does very little as a philanthropist short of giving Apple computer discounts to schools to get more market share.

We've been through this before... Jobs may not have made any public announcements about his philanthropy, but that doesn't mean that he's not donating time and/or money to worthy causes. In other words, the only people who know how much (or how little) Jobs gives away is Jobs himself and his accountant.

The sad part is so many people put him above reproach and the good guy in contrast to Gates in the great computer wars. Yet in comparing personal lives, Gates gives away more money than Jobs makes, and Jobs is not poor, yet he does very little as a philanthropist short of giving Apple computer discounts to schools to get more market share.

I guess you haven't heard how Jobs has worked with Bono and is working on AIDS amoung other things. Yea you could talk about how Gates gives away more than Jobs makes

True, but Enron was so much more than messing with stock options. it was a financial shell game, shifting the company's debt from one dummy corporation to the next in order to create the illusion of profitability.

Okay... he was implicated by an in house audit, AND reported it. Later (after reporting it) it they find that he is innocent. If this was corporate wrong doing, then why would they report it in the first place, AND THEN do responsible action and admit a mistake, and try to fix it?Yes, corporations can do evil things, and DO evil things. But that does not make everything evil, mistakes still happen, misdirected allegations still happen, just like in real life. Corporations are not intrinsically bad, and

"It might be true, it might not."Where precisely did I say otherwise? The message I replied to was entitled:

You think Enron would have reported itself?

No, Enron didn't report itself. Not only didn't Enron report itself, Enron's whole operation was based on fraud and coercion, from the top down to the folks like "Bob" twisting the arms of power plant operators in California to create an artificial energy shortage to drive up prices, careless of the fact that the blackouts they triggered led to injuries and d

A closer look at the Microsoft internal investigation informs us that, regardless of how the chair was set into motion, Balmer did not benefit from it psychologically and therefore the act might as well have never happened.

What a relief... Apple has made a press release that an internal Apple investigation found no wrongdoing by its CEO. I am sure that is worth a lot to the SEC and is in no way damage control against the investor jitters since it was leaked that the SEC was investigating...

Dude, you've obviously never dealt with Internal Audit folks before! If they had an internal audit and never reported that would be one thing, but unless something is seriously wrong with a company I tend to trust internal auditors, they are brutal. If you have anything to do with SOX or HIPPA you know what I mean.

, you've obviously never dealt with Internal Audit folks before! If they had an internal audit and never reported that would be one thing, but unless something is seriously wrong with a company I tend to trust internal auditors, they are brutal.

Heh I've never had my job called brutal before, thanks!Seriously though whilst I work for a UK Bank doing S/I, I would have thought that IA would be just as thorough in any large company.If Apple release the contents of the report, everyone can see for themselves

While you have a point, and it will be great to see the final SEC report, remember that Apple was the original "whistle blower" here. If they intended a cover-up, they never would have said anything in the first place.

Apple may have cleared him. but the SEC hasn't. I suspect Apple is only clearing him because of the speculation, rumors, and falling stock.

The internet is
buzzing [marketwatch.com] withspeculation that Steve Jobs may step down over reports that he profited $7.5
million in stock options by falsifying an executive board meeting. The financial
times has a good
overview of the unfolding story [ft.com].

The article still doesn't indicate any wrongdoing on the part of Jobs. It does suggest that apple fucked up someplace. It also kind of suggests that Jobs was involved, since he was the recipient of the options... But it doesn't say so.

Based on all the reports so far (outside Apple's own report which is full of contradictions) I would say your analogy is bit off.

A better analogy would be: If someone goes into a bank and directs his accomplice to rob it, deposit some of the robbed money into his own account, then gets caught, and then he gives the money back to the bank.

Falling stock? WTF? The only places I've seen people making a big deal out of this are posts by users on Tech sites. Meanwhile Apple stock is up nearly $4.00 today alone, and is riding at 10+ year high of over $84/share. Methinks there's some pretty heavy astroturfing going on about this. Because the facts seem to indicate that the shareholders and market in general don't give a flying fuck about this "huge" scandal. They're too busy watching Apple's continually rising sales and high profit margins to care about something as piss-insignificant as a $100 million in stock irregularities.

I mean, god damn people, this isn't ENRON or WorldCOM. Apple sure as hell isn't collapsing like a house of cards. The facts remain: Apple is making shit tonnes of money. Worst Case Scenario out of this event: Apple gets a bit of bad press nobody cares about, they pay a fairly minor fine (compared to their Billions in Cash and liquid assets) of a few hundred million plus maybe some back taxes, and maybe, MAYBE a CFO and some other financial staff get forced into early retirement. That's it. You think the board of directors (let alone the Shareholders(!)) are going to cashier Steve "Reality Distortion Field" Jobs over 10 or so million? HA! Get a fucking life!

You mean he secured counsel when he became the subject of an investigation, instead of ignoring it or defending himself like an idiot? He must be guilty! I'm unimpressed, and I'll stay that way until somebody files charges.

a stock option is worth $0 if not exercised, I have some from the dot-com era that aren't even good for wiping my ass (difference between apple's and mine is if exercised mine would have negative value).

No. A stock option is worth $0 if expired. It has non-negative value if not expired, e.g. you can profit from owning an option even if the underlying price never reaches the strike price (that's called delta hedging.)

No. A stock option is worth $0 if expired. It has non-negative value if not expired, e.g. you can profit from owning an option even if the underlying price never reaches the strike price (that's called delta hedging.)

Yeap, all you'd have to do take out an option to sale while the stock is high.

You wrote:The internet is buzzing withspeculation that Steve Jobs may step down over reports that he profited $7.5 million in stock options by falsifying an executive board meeting. The financial times has a good overview of the unfolding story.

Yet quoting from the Financial Times article you linked to

Mr Jobs later surrendered his options before they were exercised, implying that he did not gain any direct benefit from them. He was later given a grant of restricted stock by the company instead.

So where is all this internet buzz describing how Jobs 'profited' from $7.5 million in stock options that he surrendered without exercising? You might want to RTFA [nytimes.com] which has many more specifics than your links.

You further claim that Apple 'cleared him' due to speculation, rumors, and falling stock. But please explain how Apple can formally and legally exonerate Jobs without demonstrating exhaustive proof within SEC accounting rules that Jobs wasn't involved. Ie, they handed all results of their internal inquiry directly to the SEC, and if they falsified anything in there they'd be in far more trouble than they are now. And their internal investigation was quite exhaustive, with over 26,000 man hours [streetinsider.com] devoted to this issue.

Also, you'll notice in that NYT article that the focus of the blame seems to lie on two executives (Fred Anderson and Nancy Heinen) that have both subsequently quit Apple since this backdating scam and also have their own independent lawyers ready. And FWIW, I can't find the story now, but an analyst at Piper Jaffray claimed a less than 5% chance Jobs was illegally involved but that as CEO it's standard practice to retain one's own legal counsel for such a situation.

Yes he was handed stock and he handed it back long before the initial story about the start of the internal investigation. You speak of the SEC but they have not been involved as of yet nor did they initiate this investigation. Nobody has been charged with anything and the SEC has not accused Apple of anything so far. All we have is a bunch of spin from the media. Had Apple not taken the initiative to investigate this matter, we would probably not be aware of this issue at this moment.

The only thing insightful in this comment is how stupid the person making it is. Never mind the fact that Jobs gained nothing from the stocks since you cant profit from stocks you turned in, but for all purposes a internal investigation IS like the SEC going after them. All of the data gained from a internal audit is turned over to them and there are extremely strict rules for reporting these audits, meaning that if they couldnt find anything, then nothing the SEC could do would likely turn up anything eith

Check out the documents Apple filed with the SEC Friday [sec.gov] acknowledging that a grant of 7.5M options to CEO Steve Jobs with an exercise price of $18.30 dated 10-19-2001 was actually finalized on 12-18-2001 when the share price was $21.01. Apple goes on to note that approval for the grant was 'improperly recorded' as occurring at a special Board meeting on 10-19-2001 - a special Board meeting that Apple now admits did not occur. Apple takes a page out of Mark Hurd's I-know-nothing-playbook [siliconvalley.com], insisting that 'There was no evidence, however, that any current member of management was aware of this irregularity.' Which begs the question: Don't any members of Apple management read those Proxy Statements they provide to investors and the SEC? In 2002 [sec.gov] and 2003 [sec.gov], Apple's Proxy Statements clearly stated that: 'in October 2001 the Compensation Committee recommended and the Board approved granting Mr. Jobs options to purchase 7,500,000 shares under the 1998 Plan in order to provide him with an incentive to continue to serve as the Company's CEO and maximize shareholder value.' Apple also points out in its SEC filing that Jobs did not receive or financially benefit from backdated options, apparently feeling that the 5M shares of restricted stock Jobs was given after 'voluntarily canceling' his underwater options grants in 2003 [cnn.com] shouldn't count.

We have historically not agreed with Apple's "no harm, no foul" treatment of its shareholders when it comes to option issuance, pricing, and follow-on dilution. We are especially cautious about the spin that this CEO grant was simply canceled. A careful read of the situation reveals two CEO grants under review, representing 17.5 millions options with strikes in the $18-$30-plus range, were nearly worthless in March 2003 when they were cance

I don't see any possible motive for Jobs to do this other than to see just how well the Reality Distortion Field(tm) works.

I don't think you understand how the billionaire mind works. They don't think of much of motivation when dealing with such trivial amounts of money. When you find a quarter in the vending machine change slot, how much effort do you exert to find the proper owner. What were your motivations in putting it in your pocket?

Yes. But this keeps him from being charged for fraud. "Three elements are required to prove fraud: a material false statement made with an intent to deceive (scienter), a victim's reliance on the statement and damages." Clearly, the first two occurred. If this were done last year, Jobs would already be packing up his office, because of the increased burden of proof thanks to SOX [wikipedia.org]. The question then is if the financial statements issued back then violated the accounting standards of the day.

An internal investigation by the Clinton Justice Department found Algore did nothing wrong when he accepted gobs of soft money from the Bhuddist Monks at a "funraiser" due to "No Controlling Legal Authority"
An Inconvenient Truth, Al?

It's not like we really need this kind of crap in this story, but an internal investigation by the Bush DOJ found that Bush did nothing wrong when he lied to justify a war, causing the deaths of thousands of americans, and when he approved illegal^Wformerly illegal wiretaps on private citizens, and all the other shit he's done that has caused him to issue more presidential writs than all former presidents combined.

Or in other words, we can point fingers all day, so let's try and keep the political crapo

..... then that's cool right? Perhaps. But am I the only one who has a bit of an issue with no third party (and by that I mean COMPLETELY outside Apple) oversight? It's not as if they don't have an interest in this right?

But am I the only one who has a bit of an issue with no third party (and by that I mean COMPLETELY outside Apple) oversight?

You mean like the SEC [sec.gov], to whom Apple directly gave the results and all details of their formal investigation to? And to whom they're legally obligated when carrying out said investigation, under penalties of perjury?

Now of course just because Apple finds these conclusions on its own investigation which is 'on the record', doesn't mean they're inherently innocent, the SEC will give th

The US Securities and Exchange Commission and Department of Justice have independently terminated investigations into Apple's reportedly irregular stock option grant activities. A DoJ spokesperson was quoted as saying "A superior jurisdiction has cleared Apple and Steve Jobs of all allegations, so we obviously have no grounds to pursue."

It seems that you've been living two lives. One life, you're Fred D. Anderson, Chief Financial Officer for a respectable software company. You have a social security number, pay your taxes, and you... help your landlady carry out her garbage. The other life is lived in the back rooms, where you go by the hacker alias "Neo", and are guilty of virtually stock option crime we have a law for. One of these lives has a future, and one of them does not.

Of course Apple cleared Jobs of any wrong doing, who else is going to bail their ases out ?

Ah but Apple wouldn't of had to do any covering or bailing out their asses if Apple never reported the backdating to begin with. If Apple had kept it's mouth shut none of this would have happened, the only reason it's out in the open is because Apple reported it to the SEC to begin with, then started an investigation.

Apple said that while its investigation revealed that the company's stock option procedures did not include sufficient safeguards to prevent manipulation, Mr. Jobs did not benefit financially from any questionable stock awards.

If this stands, its shitty news for anyone who holds stock. What this would essentially do is legalize corporate circle-jerking. In other words, it would be OK for top buddies to make deals that individually don't directly financially benefit the decision-maker, but such deals would

And Ford granted a pardon to Nixon. I think you should take your own advice and sell off all your stock. Or just realize that laws have passed that makes this situation less likely. It is the timing of these things that makes this situation interesting.

Now, I can not attest to knowing anything about this ordeal, but it has been interesting to follow how the forum is handling it. I've noted that most of the posts on this forum largely fall into two catagories: flippint remarks, usually involving common cliches and tidbits from geek pop culture thrown in for good measure; and then fairly serious posts by people who actually READ THE ARTICLE, most of which exhonerate Mr. Jobs. Now, I expected quite a few posts that would attempt to clear him and settle the unrest it has caused... but I expected more in opposition by people who actually have something worthwhile to say.

If you actually RTFA on NYTimes and better yet, read Post,WSJ, LA Time article about it, then you would know that people who actually know anything about this is basically saying that Apple's internal investigation is a joke and there are numerous contradictions in the internal report.

The Slashdot remarks fall into three categories: jokers, Apple Fanboys, and people who actually read the articles and thinks that Steve Jobs is a crook for fixing the books (even if he tried to exchange his ill-gotten gains

For those who won't RTFA or Google into the matter - Another piece of news says
Apple acknowledges fake documents [eetimes.com]. From the article: "In the filings,
Apple [apple.com] (Cupertino, Calif.) acknowledged that
the company faked documentation to indicate that a grant of 7.5 million options
to CEO Steve Jobs was recorded at a special meeting of the board of directors on
Oct.

The 7.5mm Stock award was "given" to Steve Jobs in October 2001, hence details would have been disclosed re Senior Execs remuneration in documents suppled for that yeas AGM.
Now we are being told that nobody noticed that there had been no board meeting to award that amount of Shares to the CEO.
The CEO didn't notice his award wasn't ratifies by a Board meeting.
The CFO didn't notice
The Gen Counsel didn't notice
The Head of HR didn't notice
The internal Audit Dept didn't notice
The external Auditors in th

Are you saying that the NYT is incorrect, and Apple's own internal investigation did not clear Jobs? Or are you saying that somehow the NYT is biased in favor of Apple, and made up the entire story? Or are you actually talking about something completely unrelated to Apple, Steve Jobs, and the story at hand?

We all know that just because Apple cleared Jobs that doesn't mean there wasn't some wrongdoing on his part, but the NYT is merely reportin